Refer to the graph.Which of the three Security Market Lines depicts the situation where investors most dislike risk?
A)line A
B)line B
C)line C
D)It cannot be determined from the graph.

Question

Refer to the graph.Which of the three Security Market Lines depicts the situation where investors most dislike risk?
A)line A 
B)line B 
C)line C 
D)It cannot be determined from the graph.

Quizplus · Accepted Answer

Line C represents a higher risk premium for a given level of market risk, indicating that investors are requiring a higher return to compensate for the perceived risk. Therefore, investors are most disliking risk under the situation represented by line C.

Refer to the Graph